Akufo-Addo’s Role In The Artificial Cedi Stability Is Indisputable — Facts Do Not Bend To Political Convenience

Former President Nana Akufo-Addo's administration has been credited with playing a crucial role in maintaining the stability of Ghana's currency, the Cedi. Critics argue that claims of an "artificial" Cedi stability are based more on political motives than factual analysis. Supporters of the current administration, however, argue that the Akufo-Addo government deserves credit for its efforts to manage the Cedi's value.

One factor cited is the Bank of Ghana's (BoG) foreign exchange interventions, which were intensified in April 2025 when the US dollar was trading at around GH¢14.90. These interventions were made possible by the foreign exchange reserves the Akufo-Addo administration had built up, which reportedly stood at about US$9 billion at the end of their term.

The BoG's aggressive interventions, worth approximately US$1 billion each month, were seen as an unprecedented move that could potentially divert attention from broader economic reforms. While central bank interventions are not inherently problematic, the magnitude and sustainability of such measures are important considerations.

The BoG's ability to sustain these interventions was also influenced by external factors, such as rising international gold prices and Ghana's debt restructuring, which helped ease immediate debt servicing pressures. However, as the benefits of these debt restructuring measures diminish and external debt obligations increase, the BoG may face growing challenges in maintaining the current intervention level, especially if foreign exchange inflows weaken.

The BoG's initiatives, like facilitating direct trade with China using the Cedi, could potentially help reduce the demand for foreign exchange and provide some relief to the currency. Yet, the overall benefits of such measures depend on various factors, including the settlement mechanism, trade balance, and the extent to which the arrangement reduces net foreign exchange requirements.

The long-term viability of the current intervention strategy is therefore contingent on Ghana's capacity to strengthen its domestic production, reduce import dependence, and boost export competitiveness. Ultimately, currency stability that relies on indefinite central bank dollar injections is unlikely to be sustainable in the long run.